I agree with most but there area couple of exceptions to your...

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joewolf

5,639 Posts.

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31/01/15

13:41

Post #: 14674140
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Originally posted by Kerbey ↑

Silver lining for me is the DRP will be for a lower price and can get more shares. I plan to hold this for the next decade at least and see if the DRP can help me to get compounding returns.

I bought this share for mainly two reasons:

1. High dividend yield with DRP at 3% discount giving ability to get compounding returns.
2. As a hedge to my long-only low cost LICs for which I have larger positions.

Must admit I don't know what is going on with the stock picking here. I thought shorting iron ore and oil stocks was a pretty obvious market move (6 months ago). Especially the mid cap ones that have higher costs. Was hoping to see the result of this kind of trade showing up as gains in the short portfolio of ALF. One of the reasons I bought in (no. 2 above).

I hope they aren't shorting health care stocks. They may seem expensive looking at the PE ratios and low div yields. However despite this they have strong balance sheets, growing earnings and dividends and are not in any financial distress and hence not a good one to bet against.

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I agree with most but there area couple of exceptions to your rule.

I think that in effect you have to ignore the 3% discount as that can and will be lost by poor stock-picking.

What has to happen in the next few months is the management have to sort the problem out or the stock will start trading at a discount to NAV. Reputations are lost very quickly.

I wont hold if they dont get back to being right more than they are wrong.

Last edited by joewolf: 31/01/15

ALF Price at posting: $1.40 Sentiment: None Disclosure: Held
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